Although Gujarat has one of the most extensive road networks in India, its roads were clogged with traffic, resulting in long travel times, high vehicle-operating costs and low-quality service. Road conditions were projected to deteriorate further as transport demand doubled within 10 years and the number of vehicles increased. In addition, investment in the roads sector was insufficient and declining, sector agencies had only limited capacity to build high-quality road infrastructure on schedule, and funding for ongoing maintenance of roads was inadequate, leading to a backlog in road maintenance.
IBRD supported the Gujarat State Highway investment program with cumulative assistance of $280 million to date. The project focuses on widening and strengthening state highways; land acquisition, relocation and resettlement; periodic maintenance of state highways; design and supervision of civil works contracts; and institutional strengthening, technical advice, training and equipment. The Government of Gujarat directly borrowed the IBRD funds with a guarantee by the Government of India.
Road and maintenance improvements have given the public increased access to social, health, education, and economic services. It’s estimated the project has increased employment rates by 7 percent. Business output has improved due to the reduction of transport bottlenecks and costs. Farmers are now able to make greater use of mechanized equipment for cultivation and transport bulky products like fertilizer, seeds, and pesticides more easily to their fields, increasing their profits. Industries also have easier access to raw materials, raising their profitability. Other results include:
- Improvement in 1,900 kilometers of roads between 2000 and 2007
- 10 percent reduction in travel times
- 20 percent increase in available funding for regular road maintenance
- 16 percent fewer traffic accidents
Toward the Future
The Government of Gujarat is planning to initiate several related projects with its own funds. The World Bank is carrying out a study (financed by a special trust fund set up jointly by the World Bank and the UK Department for International Development) on the Gujarat project to determine the key success factors for implementation and sustainability of institutional reforms in the road/highway sector. The World Bank plans to hold a workshop for all Indian states in Gujarat and also a Global Development Learning Network event to share and disseminate the findings of this study.